South Korean operator Lotte Duty Free has been chosen as the new liquor and tobacco concessions operator to replace Hong Kong-based duty free retailer DFS at Changi Airport after almost four decades.
The six-year term contract will begin on 9 June 2020, and will cover all 18 liquor & tobacco stores across Changi’s four terminals, spanning more than 8,000 sqm of retail space, according to a statement by CAG on Thu (24 Oct).
CAG said yesterday that Lotte’s proposal “stood out with its strong omni-channel and marketing ideas which will propel CAG’s travel retail strategy forward”.
“Lotte, the world’s second largest travel retailer in terms of sales turnover, possesses extensive experience in the travel retail industry including in the liquor & tobacco segment.
“With concession experience in markets like Australia, Japan, New Zealand, South Korea and Vietnam, it has a proven track record of operating at a scale similar to that at Changi Airport and possesses deep consumer understanding.
“Lotte has also won multiple awards over the years for its branding, marketing and customer satisfaction, the latest of which is the Technology Success Story of the Year awarded by Frontier Awards held in Cannes, France.
“The CAG-Lotte partnership will leverage the strengths of both parties to grow the concession at Changi Airport,” the statement read.
CAG added that renovation works on the new outlets will be carried out in phases to ensure that passengers’ shopping needs are met at all times, adding that Lotte’s offerings will be available on the iShopChangi online store from June 9.
The award of the tender follows DFS’ announcement earlier this month regarding laying off staff at its store in Changi Airport, as well as at its T Galleria shop on Scotts Road and its shared services centre in Chai Chee.
DFS, however, said that it will continue to operate luxury concessions at Changi, as well as its T Galleria outlet in Scotts Road and its Singapore Cruise Centre business, in addition to planning to expand its business elsewhere.
DFS previously indicated possibility of working jointly with new operators in Changi Airport
DFS told The Business Times in Aug that around 500 people were “directly employed” at its liquor and tobacco concession operations, and that “they would have the option of working with the new operator or with other operators in the airport”, with some being potentially “deployed to other DFS locations in Singapore”.
The retrenchment exercise, which DFS dubbed a “workforce reduction exercise”, had already taken immediate effect on 26 Sep for some of the staff members, predominantly those from T Galleria, according to a TODAY report on 27 Sep.
When queried by TODAY regarding the number of staff affected by the retrenchment exercise, DFS declined to comment on the matter. However, the company said that it currently continues to employ nearly a thousand employees in Singapore.
A DFS spokesperson told TODAY that staff members in the liquor and tobacco concession operations at the Changi Airport store were handed formal notice of their termination.
“This will take effect in June 2020 when DFS will officially exit the concession and a new operator will assume management,” said the spokesperson.
DFS “could have better handled” recent layoffs; employers should “act responsibly if they need to retrench”: Manpower Minister Josephine Teo
Manpower Minister Josephine Teo said earlier this month, in light of DFS’ layoffs last month, that employers should “act responsibly if they need to retrench”.
She opined that “DFS could have better handled their recent retrenchment exercise, particularly in the way they communicated with their employees and how they offered the severance packages”.
“The Tripartite Alliance for Fair and Progressive Employment Practices (Tafep) has since stepped in to engage DFS. The company is now adjusting its approach and taking appropriate steps to address the concerns of the affected employees.
“The Taskforce for Responsible Retrenchment & Employment Facilitation has also been activated. We will help the affected #DFS employees through this transition,” Teo assured.
“Retrenchment is never easy, but handling it sensitively and responsibly can go a long way in helping employees through the transition,” she said.
Teo also noted that “retrenchment levels in Singapore have not risen beyond that seen in the last few years”.
DFS said that it is “committed to carrying out (the retrenchment) exercise in a fair and sensitive manner”, adding that it has also come up with a “series of measures” to ease the transition of staff members who were retrenched, in tandem with guidelines by the Tripartite Advisory from the tripartite partners, comprising the Ministry of Manpower, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF).
“We will continue to work closely with (the Taskforce for Responsible Retrenchment and Employment Facilitation), Workforce Singapore and external outplacement agencies to provide support to affected staff in their transition in the next several months,” said a DFS spokesperson.
Such measures will cover “outplacement assistance” featuring “personalised one-on-one career coaching, job-matching, careers and job fairs, re-training and re-skilling, and employability skills workshops”, as well as counselling for retrenched staff who require the service.
The DFS spokesperson also noted that it has received a letter on 25 Sep from the Singapore Manual and Mercantile Workers’ Union (SMMWU), a general union affiliated to NTUC, and is looking forward to “further dialogues” with both unions “to promote good industrial relations for our mutual benefit and that of our staff”.